Lead Opinion
[¶ 1] Arrow Midstream Holdings, LLC and Arrow Pipeline, LLC (collectively “Arrow”) appealed, and Tesla Enterprises, LLC (“Tesla”) cross-appealed, from a judgment dismissing without prejudice for lack of jurisdiction. its action against 3 Bears Construction, LLC (“3 Bears”) and Tesla for breach of contract and a declara
I
[¶ 2] In 2013, Arrow, a Delaware limited liability company, hired 3 Bears,' a North Dakota limited liability company, to be the general contractor for the construction of a pipeline located on a right-of-way easement acquired by Arrow from the Bureau of Indian, Affairs over Indian trust land on the Fort Berthold Indian Reservation. See 25 TJ.S.C. §§ 821 and 323. The easement was “for the purpose of installing oil, gas and water lines” and described the right-of-way as “11,882.77 feet in length and 13.520 acres in , area. (34.206 acres during construction), more or less, ... and shall be buried a sufficient depth below the surface of the land so as not to interfere with cultivation.” 3 Bears, which has its principal place of business in New Town, entered into a subcontract with Tesla, an Alaska limited liability company, to supply materials and labor for the construction. 3 Bears is owned by two members of the Three Affiliated Tribes (“Tribe”) and is certified under the Tribal Employment Rights Ordinance (“TERO”). 3 Bears claims Arrow was a covered employer- who was required to comply with TERO rules.
■ [¶ 3] After the pipeline was completed, a dispute arose between 3 Bears and Tesla concerning amounts Tesla claimed it was owed by 3 Bears for work Tesla performed. In mid-2014,' Tesla sent Arrow a notice of right to file a pipeline lien under N.D.C.C. ch. 35-24. Tesla recorded the pipeline lien against Arrow in the Dunn County recorder’s office in -June 2014. In July 2014, Arrow commenced this action in state district, court challenging the validity of the pipeline lien, seeking indemnification, and claiming 3 Bears breached -the parties’ contract. In August 2014, 3 Bears 'moved to dismiss for lack of subject matter jurisdiction. In November 2014, 3 Bears filed a complaint against Tesla and Arrow in Fort Berthold Tribal Court. 3 Bears sought a declaration that the pipeline lien was invalid, alleged Arrow had breached the master service contract, and requested an award of damages.
[¶ 4] In December 2014, the state district court agreed with 3 Bears’ argument that it lacked subject matter jurisdiction over the lawsuit. The court concluded “exercising jurisdiction over this action under the circumstances presented here would infringe upon Tribal sovereignty;” The court further concluded, “at the very least, Arrow and 'Tesla, as a matter of comity, should be required to exhaust their tribal court remedies before‘this Court exercises' jurisdiction.” The court dismissed the action'-“without prejudice to allow any of the parties to re-open the case without payment of another filing fee should it become necessary for purposes of enforcing the Tribal Court action or for any other reason.”
II
[¶5] 3 Bears argues this Court lacks jurisdiction to hear the appeal because the district court dismissed the action without prejudice.
[¶ 6] “Before we consider the merits of an appeal, we must have jurisdiction.” Choice Fin. Grp. v. Schellpfeffer,
Ordinarily, an order dismissing a complaint without prejudice is not appeal-able because either side may commence another action after the dismissal. State v. Gwyther,1999 ND 15 , ¶ 10,589 N.W.2d 575 . However', a dismissal without prejudice may be final and appeal-able if it has the practical effect- of ter-' minating the litigation in the plaintiffs chosen forum. Rodenburg v. Fargo-Moorhead YMCA,2001 ND 139 , ¶ 12,632 N.W.2d 407 ; Triple Quest, Inc. v. Cleveland Gear Co.,2001 ND 101 , ¶ 8,627 N.W.2d 379 . In this case, the order and judgment effectively foreclose litigation of Winer’s action in the courts of this state. Consequently, we conclude the dismissal is appealable.
Id. at ¶ 6.
[¶ 7] We likewise conclude in this case that the judgment dismissing the action without prejudice is appealable.
Ill
[¶8] Arrow argues the district court erred in concluding it lacked jurisdiction, and the Fort Berthold Tribal Court had exclusive jurisdiction, to decide the validity Of the pipeline lien and the parties’ con-tractüal disputes.
[¶ 9] There is no dispute about the facts relevant to a determination of the jurisdictional issue in this ease* “‘When the jurisdictional facts are . not in dispute, the question of subject-matter jurisdiction, is a question of law, and we review the jurisdiction decision de novo.’ ” Gustafson v. Estate of Poitra,
[¶ 10] While tribal court jurisdiction is determined under the test set forth in Montana v. United States,
State jurisdiction and tribal jurisdiction in Indian country raise two separate legal questions. For example, if application of the Montana test results in a finding that a tribe lacks jurisdiction over a non-Indian on non-Indian land in Indian country, it does not - necessarily follow that the state can enter Indian country and impose its laws by prosecuting or controlling the non-Indian behavior.' Whether state law can -apply in Indian country remains subject to the Williams test, even as -the Montana analysis considers whether tribal authority is necessary to protect vital tribal interests. ' How that preemption/infringement test is applied, however, may take into account, as one factor, the absence of tribal jurisdiction. Thus, for example, in Three Affiliated Tribes of the Fort Berthold Reservation v. Wold Engineering, P.C., [467 U.S. 138 ,104 S.Ct. 2267 ,81 L.Ed.2d 113 (1984),] the Court considered the tribes’ decision not to assert jurisdiction over suits against non-Indians, together with the fact that .the tribes themselves sought to invoke the state court’s jurisdiction, as weighing in favor of state authority over those actions.
See also Winer,
A
[¶ 12] Generally, “absent a different congressional direction, Indian tribes lack civil authority over the conduct of nonmembers on non-Indian land within a reservation.” Strate v. A-1 Contractors,
[T]he inherent sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the tribe. To be sure, Indian tribes retain inherent sovereign power to exercise some forms of civil jurisdiction over non-Indians on their reservations, even on non-Indian fee lands. A tribe may regulate, through taxation, licensing, or other means, the activities of nonmembers who enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements.... A tribe may also retain inherent power to exercise civil authority over the conduct of non-Indians on fee lands within its reservation when that conduct threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe.
[¶ 13] The district court ruled the first Montana exception on consensual relationships between nonmembers and tribal members did not apply because, although 3 Bears is owned by two tribal members, 3 Bears is a limited liability company organized under North Dakota law, see N.D.C.C. ch. 10-32.1, and therefore, 3 Bears is not a member of the Tribe.
[¶ 14] The district court’s conclusion on the first Montana exception is supported by this Court’s decision in Airvator, Inc. v. Turtle Mountain Mfg. Co., 329 N.W.2d 596 (N.D.1983). In that case, Airvator brought a breach of contract action in state court against a corporation incorporated under North Dakota law in which 51 percent of the corporation’s stock was held by Indians. Id. at 597. The district court dismissed the action for lack of subject matter jurisdiction because the majority of the corporation’s stockholders were Indian and the major part of the contract was to be performed on the reservation. Id. at 598. This Court reversed, noting “a corporation is an entity distinct and separate from its shareholders, directors, officers, and agents,” and concluded “state-chartered corporations should be treated as non-Indians independent of their percentage of Indian shareholders.” Id. at 602, 603.
[If 15] 3 Bears argues Airvator was wrongly decided and relies on caselaw it claims establishes that the form in which a tribe or its members conduct business is irrelevant for jurisdictional purposes. See Mescalero Apache Tribe v. Jones,
[¶ 16] 3 Bears’ arguments are not persuasive. First, Mescalero and Confederated Tribes concerned tax immunity under specific provisions of federal law for permanent improvements on land owned by the United States and held in trust for Indians, and GMAC did not involve a question of Indian jurisdiction. Second, the Mescalero Court’s comment was made in the context of whether the tribe had incorporated itself as an Indian chartered corporation under 25 U.S.C. § 477. Third, relevant caselaw disregards the differences between corporations and limited liability companies for purposes of determining Indian jurisdiction. See, e.g., Somerlott v. Cherokee Nation Distribs., Inc.,
[¶ 17] 3 Bears is a limited liability company formed under North Dakota law and is not a member of the Tribe. The district court did not err in concluding the first Montana exception did not apply because there was no consensual relationship between nonmembers and “the tribe or its members.”
B
[¶ 18] The district court determined the second Montana exception applied to give the tribal court jurisdiction because “exercising' jurisdiction over this action under the circumstances presented here would infringe upon Tribal sovereignty.” The court refused to equate the pipeline right-of-way easement with “non-Indian fee land” and said “[t]his case is about
The pipeline easement here involves a right of way to construct, install, operate and maintain oil, gas, and water pipelines on the Indian reservation. The Tribe here has a much more direct and significant interest in the right -of way easement because it involves the development and use of tribal resources and directly involves the Tribe’s economic interests.
[¶ 19] Arrow contends the district court erred in ruling the right-of-way easement granted to it by the Bureau of Indian Affairs is not the equivalent of non-Indian fee land. Arrow relies on the United States Supreme Court’s decision in Strate,
Forming part of the State’s highway, the right-of-way is open to the public, and traffic on it is subject to the State’s control. The Tribes have consented to, and received payment for, the State’s use of the 6,59-mile stretch for a public highway. They have retained no gatek-eeping right. So long as the stretch is maintained as part of the State’s highway, the Tribes cannot assert a landowner’s right to occupy and exclude. Cf. [South Dakota v.] Bourland, 508 U.S. [679,] 689 [113 S.Ct. 2309 ,124 L.Ed.2d 606 (1993) ] (regarding reservation land acquired by the United States for operation of a dam and a reservoir, Tribe’s loss of “right of absolute and exclusive use and occupation .... implies the loss of regulatory jurisdiction over the use of the land by others”). We therefore align the right-of-way, for the purpose at hand, with land‘alienated to non-Indians. Our decision in Montana, accordingly, governs this case.
Id. at 455-56,
[¶ 20] The parties have not cited, and we, have not found, a case classifying the ownership status for Indian jurisdictional purposes of a right-of-way easement for a pipeline on trust property. Courts have considered rights-of-way easements in other contexts and have concluded that Stmte applies to rights-of-way easements granted to private entities over Indian reservation
The Supreme Court [in Strate ] considered the following factors before ultimately concluding that the state highway was the equivalent of non-Indian fee land: (1) the legislation creating the right-of-way; (2) whether the right-of-way was acquired with the consent of the tribe; (3) whether the tribe had reserved the right to exercise dominion and control over the right-of-way; (4) whether the land was open .to the public; and (5). whether .the right-of-way was under state control. [520 U.S.] at 454-56 [117 S.Ct. 1404 ].
Id. at 950. The' court concluded that although the electric cooperative’s easements met only the first three criteria in Strate, the “rights-of-way are the equivalent of non-Indian fee land for the purpose of considering the limits of the Tribe’s regulatory jurisdiction.” Id. In Burlington N. R.R. Co. v. Red Wolf,
There is no principled distinction to be made between the jurisdictional analysis applicable to a congressionally-granted highway right-of-way and a congressionally-granted railroad right-of-way. In each case, Congress has acted within its plenary power to bestow rights to a parcel of land upon one party, thereby limiting the rights of another to the same land.
Id.
[¶21] In this case; Congress has authorized grants of rights-of-way over Indian lands, see 25 U.S.C. § 323-328, and has specifically authorized grants of easements for pipelines. See 25 U.S.C. § 321. 3 Bears does not contend that the Tribe refused to consent to this pipeline ■ easement. 3 Bears points to nothing establishing that the Tribe reserved the right to exercise dominion and control over the pipeline easement. Assuming for purposes of argument this pipeline easement is not under state control and the land apparently is open to the public, we conclude, as did the courts in Adams and Red Wolf, that the right-of-way pipeline easement acquired by Arrow is the equivalent of non-Indian fee land.
[¶22] In concluding the parties’ conduct threatens the political integrity, economic security, or the health or welfare of the tribe, the district court reasoned the Tribe has a “direct and significant interest in the right of way easement .because, it involves the development and use of tribal resources and directly involves the Tribe’s economic interests.” We disagree for two reasons.
[¶ 23] First, the Tribe' has not intervened or made an appearance in this action. This Court has ruled that a private party has no standing to advance a tribe’s interests when the tribe itself fails to appear. See Baker Elec. Coop., Inc. v. Pub. Serv. Comm’n,
[¶ 24] We conclude the district court erred in ruling that, under Montana, the tribal court had jurisdiction over this lawsuit.
IV
[¶ 25] State court jurisdiction in Indian country is governed by the United States Supreme Court’s decision in Williams,
[T]he United States Supreme Court [in Williams ] held that state courts do not have jurisdiction over a claim by a non-Indian against an Indian which arises on an Indian reservation. In that case a non-Indian, operating a general store on an Indian reservation, brought suit in Arizona state court to collect for goods sold on credit to a tribal member. The Supreme Court concluded that to allow the exercise of state jurisdiction under the circumstances “would undermine the authority of the tribal courts over Reservation affairs and hence would infringe on the right of the Indians to govern themselves.” Williams v. Lee, supra,358 U.S. at 223 ,79 S.Ct. at 272 . Only “where essential tribal relations were not involved and where the rights of Indians would not be jeopardized” could state jurisdiction be asserted. Williams v. Lee, supra,358 U.S. at 219 ,79 S.Ct. at 270 . Thus, absent congressional action, the question is whether the state action infringes on the right of reservation Indians to make their own laws and be ruled by them. Williams v. Lee, supra,358 U.S. at 220 ,79 S.Ct. at 271 .
Essentially, under Williams, state court jurisdiction is foreclosed if it is preempted by incompatible federal law or if it would undermine the right of reservation Indians to make their own laws and be ruled by them. See McKenzie Cty. Soc. Servs. Bd. v. V.G.,
[¶ 26] 3 Bears relies on the Indian Reorganization Act of 1934, 25 U.S.C. §§ 461 et seq., which authorizes tribes to adopt a constitution and bylaws, and 25 U.S.C. § 476(e), which gives a tribe the power “to prevent the sale, disposition, lease, or encumbrance of tribal lands, interests in lands, or other tribal assets without the consent of the tribe.” 3 Bears also cites to provisions of the Constitution of the Three Affiliated Tribes of the Fort Berthold Indian Reservation which carry out these powers and set forth the jurisdiction of tribal courts: Art. VI, § 5(1) (power to make assignments and leases of tribal lands, and otherwise to manage tribal lands, interests, interests in tribal lands, and property upon such lands); Art. IX, § 1 (power to deal with tribal lands); Art. I (jurisdiction of tribe extends to all land within reserva
[¶ 27] These provisions establish that the Tribe has been given general Congressional authority to form a government and court system, and that the Tribe has exercised that authority. But the federal statutes do not suggest the state district court is preempted from entertaining this lawsuit, or that Montana and its progeny no longer govern questions of tribal court jurisdiction. This case involves the validity of a pipeline lien created under state law, and the Fort Berthold Tribal Code has no provision addressing pipeline construction liens. Cf. N. Cent. Elec. Coop., Inc. v. N.D. Pub. Serv. Comm’n,
[¶ 28] We conclude the district court has jurisdiction to entertain this action.
V
[¶29] The district court ruled in the alternative that “Arrow and Tesla, as a matter of comity, should be required to exhaust their tribal court remedies before this Court exercises jurisdiction.”
[¶ 30] 3 Bears argues the district court’s decision that Arrow and Tesla are required to exhaust tribal court remedies is supported by the United States Supreme Court’s decisions in Iowa Mut. Ins. Co. v. LaPlante,
[¶ 31] We do not address other arguments raised because they are either unnecessary to the decision or are without merit.
VI
[¶ 32] We conclude the district court has subject matter jurisdiction over this
Concurrence Opinion
specially concurring.
[¶ 35] I agree with the majority opinion. I write to note many of the concerns still exist that I expressed in Gustafson v. Estate of Poitra,